Business Process: Loans Given Exercises

Unit: Business Process Loans Given

At the end of these exercises, you will be able to:

 Have an overview of the procedure for creating a loan.
 Create loan write-offs.
 Post disbursements with/without third parties.
 Post first interest payments and repayments.
Your company has granted a loan to a customer. You want to enter the
contract details and the conditions agreed in the system.

1-1 Create a business partner in the business partner role without reference to a
loan contract. Enter the form of address, name, address and other
characteristics for the person.

1-1-1 Check whether the General Business Partner role is defined.

1-1-2 Specify the DAR1 group (input help)
1-1-3 For the Address, enter the data for:
 Form of address
 First and last names
 Street and house number
 Zip code and city
 Country
1-1-4 For the ID, enter the data for:
 Marital status
 Nationality
1-1-5 For the Payment Details, enter:
 ID: 1
 Country : EN
 Bank key: -> Select using input help
 Bank account (maximum of ten figures).
1-1-6 Enter any additional data for the person.
 1-1-7 Save the data.
1-1-8 Note the business partner number for subsequent processing.

1-2 Create a contract for a mortgage loan in your company code TRXX (XX =
group ID). Use the business partner that you created as the business partner. In
Loans Management, the main loan partner role is assigned automatically to the
business partner.
1-2-1 Enter the basic data for the loan:
Basic data:
 Loan type: 1A
 Loan category: Standard loan
 IPD control: Contract variant
Analysis data:
 Maturity: > 10 years (!)

Make sure that you enter the maturity information. This is very
important when you post the business operation later on.

1-2-2 Enter the loan conditions.

Condition header:
 Commitment capital: 100,000
 Disbursement rate: 100 %
 Repayment type: Annuity
 Discount determination: Total with first disbursement.
 Fixed from: January 02 YYYY (YYYY = current calendar year)
 Fixed until 12/31/YYYY (fixed for ten years).
Individual condition items:
 Nominal interest at a rate of 6%, paid every month in arrears.
 Annuity repayment at an annual rate of 2%, due every month in arrears,
repayment cleared immediately.
 Processing charges of 500 are due at the end of each year.
1-2-3 Have the system calculate the effective interest rate and the term end for
the contract.
1-2-4 Look at the cash flow generated on the basis of the conditions entered.
1-2-5 Display the customer number of your business partner in the
partner overview. Note the number for subsequent processing.
 1-2-6 Save the mortgage loan and note the assigned contract
number
Exercises
 Unit: Business Process Loans Given

At the end of these exercises, you will be able to:

 Process a loan disbursement.

Once you have created the loan contract, you can disburse it. You have to
trigger the outgoing payment and the posting to the appropriate accounts.

1-3 Enter a loan disbursement.

1-3-1 Enter a loan disbursement for your loan:
 Select the flow type that controls disbursement.
 Enter the text you want to appear in the disbursement.
 Check the payment method and enter the bank details for your business
partner.
Enter the following data:
 Payment Date: 03. January YYYY (YYYY = current calendar year)
 Interest valuation date: 03. January YYYY (YYYY = current
calendar year)
 Withhold until: 03 January YYYY (YYYY = current calendar year)
1-3-2 Simulate the disbursement (WITHOUT POSTING!) and examine the
posting log.
1-3-3 Post the disbursement. Make a note of the document number displayed by
the system.

1-4 Check the following items:

1-4-1 Use the document number to check that the details correspond with
Financial Accounting. Compare the
the customer entries under Financial Accounting.

1-4-2 Return to the loan contract.

 Look at the changes that arise to the cash flow as a result of the
disbursement.
 Call up the account statement for your business partner. Is the information
in the account statement correct?
Exercises
 Unit: Business Process Loans Given

At the end of these exercises, you will be able to:

 Post incidental costs for disbursements
 Make partial disbursements of the loan amount
 Make disbursements with third party drawings
 Process partial rescission.
After creating a second loan contract, you make a first partial
disbursement and withhold the charges. The second partial disbursement
is made to a third party. The customer writes off the remaining loan
amount (partial rescission).

1-5 Create a second loan contract by copying the first loan contract. Copy the
data for the conditions and the business partner.
1-5-1 Change the following data for the new contract:
 Increase the commitment capital to 200,000.
 Change the interest rate to 5%.
 Remove the processing charge from the condition items.
Save the loan. Accept the message about the change
to the effective interest rate.
Note the new loan number.

1-5-2 The loan is to be disbursed to the loan partner. However, a processing

charge of EURO 50 is to be withheld as a partial disbursement. The
processing charge is to be entered as an incidental cost for the
disbursement.
Enter Euro 50 as an incidental cost for the disbursement with the following
data:
 Flow type: 3145 (input help)
 Amount: 50 Euro
 Due on: 03. January YYYY (YYYY = current calendar year)
 Payment Date:03. January YYYY (YYYY = current calendar year)
 Calculation Date: 03. January YYYY (YYYY = current calendar year)
 Mark the withheld amount for the incidental costs.
 Return to the basic data for the disbursement. Check the cash flow for the
disbursement amount.
1-5-3 The first partial disbursement (=70% of the loan capital) for the loan is
due for disbursement. Enter the following data for the partial
disbursement:
 Payment Date: 03. January YYYY (YYYY = current calendar year)
 Interest valuation date: 03. January YYYY (YYYY = current
calendar year)
 Withhold until: 03 January YYYY (YYYY = current calendar year)
 Disbursement: 70%.
Check the payment amount and the cash flow.
Post the partial disbursement.

1-5-4 The second partial disbursement (=20% of the loan capital) is not paid to
the main loan partner, rather it is transferred directly to the builder as a
person entitled to draw.
Create a new disbursement for the loan contract with the following data:
 Payment Date: 10. January YYYY (YYYY = current calendar year)
 Interest valuation date: 10. January YYYY (YYYY = current
calendar year)
 Withhold until: 10 January YYYY (YYYY = current calendar year)

Create the withdrawal for the builder with the following data:
 Drawing amount: Euro 40,000.
 Payment method: 2 (individual payment).
 Name and address
 Bank country, bank key and account number.
 Text.

Check the payment amount and the cash flow.

Post the partial disbursement.

1-5-5 The borrowing party says that the remaining loan amount of Euro 20,000
is no longer required. Process the partial rescission.
Enter the following data:
 Calculation date: 01/10/YYYY
 Condition amount: Euro 20,000
 Condition type 490
Save your entries. Check the cash flow.
Exercises
 Unit: Business Process Loans Given

After completing these exercises, you will be able to:

 Execute an automatic debit position run for interest payments and
repayments

Interest and repayments are due for the loan. You now need to generate
open items for the expected incoming payments.

1-6 Prepare the automatic debit position run for the interest payment and
repayment.
1-6-1 Go back to your first contract and switch to the cash flow. Check when the first
interest payment and repayment are due. Make a note of this date for the debit
position run.
1-6-2 Simulate the automatic debit position run.
Enter the following selection criteria:
 Company code: TRXX ( XX = your group ID)
 The loan number
 The corresponding debit position and posting date
1-6-3 Check the posting log. If there are no errors, carry out the actual debit position
run using the same selection criteria.
1-6-4 Return to the contract and look at the cash flow again. What changes do you
see?
1-6-5 Check the account statement for the contract and display the open items. Then
look at the open items for your business partner via the Loans Accounting
menu (line items for customer account).